STAN Standard Chartered Plc

By Christopher M. Matthews 

Promontory Financial Group entered into a settlement with New York's top banking regulator Tuesday, agreeing to pay $15 million and acknowledging that it didn't follow the regulator's requirements while the firm investigated potential sanctions violations by Standard Chartered PLC.

The settlement is a sudden about-face. As recently as Sunday, Promontory was preparing to challenge the move by the New York Department of Financial Services to block the firm from advising New York-based banks in some cases.

The agency took that step after saying that Promontory watered down reports about potential sanctions violations by Standard Chartered.

As reported by The Wall Street Journal, Promontory was expected to ask a New York state judge to put a stay on the DFS suspension as early as Monday, according to the documents prepared for the fight.

With Tuesday's settlement, Promontory relented on the main sticking point blocking a settlement--an acknowledgment that the firm had done something wrong.

According to a DFS news release, Promontory agreed that "in certain instances, its actions during the Standard Chartered engagement didn't meet the Department's current requirements for consultants performing regulatory compliance work for entities supervised by the Department."

In addition to the $15 million penalty, Promontory also agreed to a voluntary six month abstention from new consulting engagements that require DFS to authorize the disclosure of confidential information under New York Banking Law.

Write to Christopher M. Matthews at christopher.matthews@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

August 18, 2015 14:58 ET (18:58 GMT)

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